Lower VAT for Border Islands
If you live on one of the smaller border islands, you will also benefit from a lower VAT rate. As announced, VAT is reduced by 30% from 2026 for border islands with a population of up to 20,000. The measure previously applied to only five islands and is now extended to dozens of areas, including parts of the Northern Aegean, the Dodecanese, and Evros. The islands included in the reduced rate:
Lipsi (Dodecanese) — 778
Tilos (Dodecanese) — 746
Agathonisi (Dodecanese) — 202
Chalki (Dodecanese) — 475
Megisti (Dodecanese) — 584
Kalymnos (Dodecanese) — 17,752
Nisyros (Dodecanese) — 1,048
Patmos (Dodecanese) — 3,283
Symi (Dodecanese) — 2,603
Karpathos (Dodecanese) — 6,567
Kasos (Dodecanese) — 1,223
Astypalaia (Dodecanese) — 1,376
Limnos (Lesvos) — 16,411
Agios Efstratios (Lesvos) — 257
Ikaria (Samos) — 8,843
Fournoi (Samos) — 1,343
Oinousses (Chios) — 911
Psara (Chios) — 420
Samothrace (Evros) — 2,596
VAT Exemption for New Constructions
The 24% VAT on newly built homes continues to be suspended in 2026. The suspension began in 2020 and has been extended each year since, and it is now confirmed to the end of 2026 under Law 5246/2025. Under it, developers can request an exemption for specific projects, so instead of 24% VAT, a new property is subject only to the 3.09%* transfer tax. For the buyer, that is a significant saving, since VAT is much higher than the transfer tax.
*Important update: *Important update: The Greek Prime Minister, Kyriakos Mitsotakis, has announced that the property transfer tax for purchases by non-EU citizens is set to rise to 15%, with the change expected to apply from 1 January 2027. The implementing legislation has not yet been published, so the final scope, including how it may treat plots of land and commercial property, is not yet confirmed.
Property Tax Changes at a Glance
In summary, the measures announced in September 2025 include:
Lower annual property tax for small-town and village homeowners
A reduced rate for rental income between €12,001 and €24,000
A lower VAT rate for border islands, and a continued VAT exemption for new construction
Through these measures, large groups of property owners in Greece stand to benefit. Whether you already own a home or plan to buy, these changes can help you plan your property budget and rental income for 2026 and beyond.